Peter Schiff: Trump Loses It on Twitter
Donald Trump went on a Twitter rant Friday. In his latest podcast, Peter Schiff said the president basically “lost it.”
There was a lot of news on Friday before Trump went off on Twitter. Jerome Powell gave his speech at Jackson Hole. He was generally upbeat about the economy. Then China announced additional tariffs on $75 billion in American imports. But the real fireworks started with Trump’s tweets in response to the Chines tariff retaliation.
The tweetstorm probably really indicates that the White House, I think, is in disarray. I think the president realizes the air is coming out of this big, fat, ugly bubble, that he’s not going to get out of Dodge. He’s trying to pretend the economy is still in great shape yet now you’re hearing rumors of ‘we need a payroll tax cut,’ you know, we need stimulus for the economy. I mean, why would you stimulate an economy that’s doing great? If we have the greatest economy in the history of America, why does it need even more fiscal stimulus?”
Peter pointed out we already have an incredible amount of fiscal stimulus. The US government is already spending as if we’re in a deep recession. The CBO just revised up its budget deficit figures and it makes extremely conservative (Peter called them asinine) assumptions about the economy.
Peter pointed out if Trump doesn’t get reelected, who knows how high the deficits will run when the laundry-list of socialist programs proposed by the Democrats get enacted.
At any rate, Trump went ballistic after the Chinese announced their retaliatory tariffs. Ironically, Peter said he had heard just the day before Larry Kudlow talking about how well the trade negotiations were going.
I mean, obviously, that was just a lie. They weren’t going well at all. They’ve completely broken down. I mean, the trade war has never been this hot. It is continually escalating.”
Trump said America is “better off without” China and asked, “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” In one tweet, the president “ordered” companies to look for alternatives and stop doing business with Chinese companies.
….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
— Donald J. Trump (@realDonaldTrump) August 23, 2019
Peter said people might think Trump can’t order US businesses around but he probably can. He could simply slap sanctions on US businesses that don’t toe the line. An article at Seeking Alpha supports Peter’s comments.
Trump claimed he could use the International Emergency Powers Act of 1977 to force companies to move their supply chains out of China, but he later said he has no plans to do so for now, a point emphasized on the Sunday TV talk shows by US Treasury Secretary Mnuchin and economic advisor Kudlow. The president has no authority to simply order companies out of China, but the Act could allow him to block imports and freeze Chinese assets; such action would trigger an automatic override vote in Congress and prompt challenges in the courts.”
Peter said he thought the funniest tweets were the ones targeting the Federal Reserve. Peter said Trump is right in a sense – the Fed has been our enemy, but not in the way the president thinks.
The Fed has been an enemy of the United States because it has cooperated, it has conspired with the US government to undermine the US economy. Because of the way the Fed has worked with presidents and Congress in the past, they have blown asset bubble after asset bubble. They have pursued a reckless monetary policy designed solely to delay the day of reckoning for political purposes. They have allowed the US economy to get worse.”
Peter said the American people and the American government are drowning in debt because of the Fed. The artificially low interest rates have facilitated both consumer and government debt.
If the Fed had done its and actually served the American people instead of being the enemy of the American people and served the government instead of the people, had the Fed done its job and not lowered interest rates, then the government would not have been able to run these massive deficits. The government would have been forced to cut spending.”
Regardless, Peter said eventually the Fed will do exactly what Trump wants. It will cut rates and it will do more QE.
Peter goes on to break down Powell’s comments at Jackson Hole and to talk about some of the most recent economic data.